Major faces down 60 Euro-rebels on currency

The former Chancellor, Norman Lamont last night bluntly told John Major to "get off the fence" over a single European currency, at a heated private meeting between Tory Euro-sceptics and the Prime Minister.

In their first encounter since his sacking by Mr Major, the former Chancellor was said to have told the Prime Minister: "Let us make up our minds on a single currency now."

John Carlisle, the Tory MP for Luton North and one of Mr Major's sharpest critics, reported that the Prime Minister told the meeting: "I am persuadable."

But senior party sources said the Prime Minister kept firmly to his line, refusing to make any commitment to close the option of a single currency.

That was confirmed by other leading Euro-sceptics. Iain Duncan-Smith, the Tory MP for Chingford, said: "It was a frank exchange of views. There was never going to be a Damascus conversion."

In the Commons, Mr Major shrugged off a charge by Tony Blair of being the prisoner of the Euro-sceptics. But they in turn said they believed last night's meeting would pave the way for a more Euro-sceptic approach by the next election.

There were about 60 Tory MPs from the "Fresh Start" group at the meeting in a ministerial conference room near the Commons chamber, to urge Mr Major to go further in adopting a sceptical approach to Europe.

Nicholas Budgen, one of the Tory rebels who recently had the whip restored, described the meeting as a "show of brute force" by the group. He said people became "quite rude" by the end of the meeting. Bill Cash, a leading critic of the Maastricht treaty, said: "I did not pull my punches."

Downing Street sources said Mr Major had carefully signalled his reluctance to go into a single currency last week when he told MPs it may never happen. The sources said it was the closest Mr Major could go to rejecting a single currency without causing the resignation of Kenneth Clarke, the Chancellor, and Douglas Hurd, the Foreign Secretary.

The change of tone was reflected by Mr Hurd last night when he told a diplomatic banquet: "The dream of a United State of Europe was worthy, but always unreal."

Earlier, Mr Major told the MPs he had to avoid being "boxed in" before the Inter- Governmental Conference in 1996 on the future of Europe.

One senior party source said: "There were one or two people who clearly wanted him to move his position substantially. His position is that it is not as simple as that. There are a series of changed circumstances..." Mr Major pointed out that President Chirac had moved closer to the British position against federalism in their bi-lateral talks at the weekend, and Jacques Delors was no longer president of the Commission.

The Prime Minister was later warned by Baroness Thatcher on ITN to be prepared to sacrifice his Chancellor to rule out a single European currency. Lady Thatcher said preserving unity was "not sufficient reason for saying that you might consider a single currency ... you don't surrender your currency and your responsibility and the City of London for a Chancellor - however good that Chancellor may be."